Finding My Own Path to Shared Value

As HBR turns 90, readers are suggesting articles that have had real impact over the years. As someone who has read many — and even written one — I had any number to choose from. But to name the one piece that has resonated most with me in recent years, I would have to single out “Creating Shared Value” by Michael Porter and Mark Kramer.

The article has enjoyed much attention since it first appeared in January 2011. If you haven’t read it, the point is to present an alternative to many business managers’ fixation on creating shareholder value. When firms focus on the creation of “shared value”—shared, that is with society—they design initiatives that not only enrich their owners but leave the world better off. The “presumed tradeoff” between business interests and the good of society at large can be broken.

As an example, Porter and Kramer point to Nestlé which is, of course, a major buyer of coffee beans. The company saw an opportunity to change its procurement practices in such a way that it would not only gain more predictable access to high-quality product, but in doing so, help small farmers in impoverished areas break out of poverty, and go beyond practices that damaged the environment. Shared value was created.

Heartened by such efforts, and appalled at the low standing of the business community in the world’s most mature economies, Porter and Kramer conclude that “companies must take the lead in bringing business and society back together.”

As it happened, I read the article just as these realms were overlapping in my own life. I was transitioning from being a public company CEO to taking on a role as the Chair of Save the Children. As I did so, the theme of shared value really resonated with me and gave me hope. I knew that, if we could tap into more synergistic opportunities for corporates and non-profits, we could greatly enhance the sustainability of economic activity, and build its positive impact on communities in the most challenging parts of the world.

Now, I get to test this conviction constantly, by meeting with corporations and proposing these kinds of win-win relationships. I believe this is the only way to solve some of the world’s most daunting problems. May Porter’s and Kramer’s work inspire many more to join the fight. _____________________

Anne Mulcahy chairs the Board of Trustees for Save the Children. She is former chairperson and CEO of Xerox Corporation, having been named CEO in 2001 and chairwoman in 2002. As well as Xerox’s board, she has served on the boards of Catalyst, Citigroup Inc., Fuji Xerox Co. Ltd., and Target Corporation.